The Importance of Identity Theft Insurance

What is Identity Theft? Identity theft is defined as the act of obtaining someone’s personal information (without authorization) with the intent of using the information in a fraudulent manner. Personal identity information includes, but is not limited to: social security numbers, driver’s license numbers, banking account and credit card numbers, etc. 

Most home and renter policies provide coverage for theft of money; however, the amount of coverage is limited and does not include the expenses incurred to restore your identity and repair credit reports.  

Identity Theft Insurance is intended to cover the expenses (typically up to $25,000) related to restoring your identity and credit score, not the amount of stolen funds. Such expenses may include: costs of executing affidavits, notary and certified mailing costs, application fees for re-applying for loan(s), reasonable attorney fees and loss of income resulting from time taken off work to complete theft/fraud paperwork.

Identity theft insurance can be added to your property insurance policy (home or renters), or possibly even your auto insurance policy, for approximately $50 a year. 

According to a 2009 Identity Fraud Survey, 43 percent of identity theft cases are the result of a lost or stolen wallet, checkbook, credit card or other physical document. Inevitably, the use of stolen card/debit card numbers is among the most common forms of identity theft. 

Tips for Avoiding Identity Theft

Keep the amount of personal information in your purse or wallet to a minimum.

Don’t dispose of credit card or ATM receipts into public trash cans.

When shopping online, do so with caution.

Make sure you have up to date firewall, anti-spyware and anti-virus programs installed on your computer.

Carefully monitor your bank and credit card accounts on a regular basis. If you suspect a problem, contact your credit card company or bank immediately.